DEALBOOK; For This College Sport, the Playing Field Is a Boardroom

By KEVIN ROOSE

Published: February 10, 2012

Late last week, in a shadowy Manhattan boardroom, 16 deal makers gathered to lay the groundwork for multibillion-dollar deals that would move the markets - if only they were real.

At the first Wall Street Training Valuation Case Competition, aspiring moguls turned synergies into sport, in a deal simulation contest that was equal parts ''American Idol'' and ''Glengarry Glen Ross.''

Wall Street Training, a company that teaches corporate finance to budding bankers and regulators, originally conceived of the event last year as a friendly way to determine top talent for clients. It has since expanded it into a three-round gantlet, in which 25 teams of elite business students and undergraduates are winnowed down to four that competed in last week's finals at the New York offices of Oppenheimer, the investment bank.

''Finance is a team sport,'' said Ted Michaels, Wall Street Training's vice president for strategic development. ''We're trying to find the next generation of superstars in the financial services industry.''

During the competition, each team had 20 minutes to pitch to a panel of judges their analysis on a company in one of five sectors: oil and gas, health care, real estate, clean technology or financial services. The groups were expected to assess the value of the business, identify potential growth and risk factors and propose possible strategic alternatives for the company, including mergers, acquisitions and spinoffs.

The lineup of participants filled out the tropes of a classic rumble. There were underdogs (Rutgers), blue bloods (Princeton), West Coasters (University of San Francisco) and an overseas contingent (four Chinese students who had met during an exchange program at Tulane, three of whom were flown in from China for the competition).

Rutgers kicked off the competition with its case for Transocean, the offshore drilling company. The team proposed Halliburton and BP as potential suitors, discussed possible synergies and settled on a best-case outcome: an acquisition by BP for $24.16 billion, or $50 a share. In the real stock market, Transocean closed at $48.87 that day. The team then faced questions from the judges, investment bankers and private equity investors who grilled them about litigation risks and regulatory concerns.

Four sophomores at Princeton studying economics and finance presented a discounted cash flow model and made a pitch for First Solar, a maker of solar panels, to be acquired by General Electric in an all-stock deal. Judges questioned whether First Solar could stand up to overseas competition. They also wondered whether G.E. would shy away from such a deal given the recent flap surrounding Solyndra, a solar components maker that filed for bankruptcy last year and became a political lightning rod.

The Tulane-via-Shanghai team pegged the intrinsic value of their chosen company - Chesapeake Energy Corporation, the natural gas giant - at $28.99 to $38.66 a share. They conveyed some risks of a deal, but pitched a $3.2 billion acquisition of RPC, an energy services company.

A team from the University of San Francisco put forth a situation involving PulteGroup, a large home-building company. The team members said that with the housing market stuck in the mud, the company needed a drastic change to avoid running out of cash.

''Not only is Pulte a sell,'' one member said, ''it should sell itself.''

The San Francisco team said that an ideal buyer would be Sekisui House, the Japanese home builder that has been looking to increase its American presence.

After the final presentation, judges deliberated for several minutes inside the boardroom, leaving the participants outside in a nervous scrum.

Lori Raineri, a member of the San Francisco team who, by day, works as the president of Government Financial Strategies, a financial consulting firm based in Sacramento, said that she and her teammates had formed as a business school study group and practiced for the competition over conference calls. The team, Ms. Raineri said, had been excited to fly to New York for the event, and had spent several days touring sights like the Empire State Building.

''The trip to New York was the prize,'' she said. ''I feel like we've already won.''

When the judges emerged, the event's organizer gathered all the contestants and their supporters and announced the champions, the Tulane exchange-student team. The team members - Bo Yuan, Bohua Liu, Fiefan Qiang and Luo Xuo - collected their prizes: an oversize check for $1,000 and financial calculators.

''Very cool,'' one contestant said, eyeing a winner's calculator with the quiet envy of a runner-up.

This is a more complete version of the story than the one that appeared in print.

PHOTO: After winning the Wall Street Training competition, a team of Tulane exchange students -- from left, Bo Yuan, Bohua Liu, Luo Xuo and Fiefan Qiang -- met with Halley Li of ICR, a public relations firm. (PHOTOGRAPH BY CRAIG WILLISTON/QOOL FOTO)